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RBA holds rates at 4.35% as analysts debate hike versus cut

The debate hinges on energy risks and whether upcoming US inflation data shifts Fed expectations that support or pressure the Australian dollar.

Reported · Written up by our desk · Central Banks

FXStreet reports that the Reserve Bank of Australia unanimously kept its policy rate at 4.35% in August, but major economic forecasters are split on the direction of the next move, with energy risks cited as a key factor.

The article frames the decision against broader market positioning, noting that the US dollar softened as expectations for Fed hikes moderated and the yield curve steepened.

FXStreet adds that market participants are watching for crucial US consumer price index data on Wednesday, because a lack of a strong upside surprise could keep the US dollar rangebound.

In this environment, FXStreet describes other active price action across major currencies, with EUR/USD trading near 1.1550 in a tight range and GBP/USD hovering around the 1.3500 area, as traders wait for fresh cues from inflation data.

Latest closeEUR/USD 1.155 ▼0.1%|GBP/USD 1.351 ▲0.1%

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